“Man cannot live by bread alone”

Market Resistance

“Dynamic Packaging is a myth”

“6 nights is not sexy”

“Dynamic Package and Die”

However:

“Tour Operators and Travel Agents need to provide products to their target audiences in the most efficient, cost-effective and compelling way”

Enabling customers to be active participants in creating their own trip

What’s driving new distribution?

Air commission reductions & GDS Fees have been the primary driver for product adjustment

Emergence of the “merchant model” has changed the pricing model forever 25% vs. 10%

Total transparency has created downward pressure on prices and margins – low cost and hotel only

Rapid growth of 3rd party online distribution has created a distribution power shift

New technological advancements creating higher traveller expectations

Result = A new leisure marketplace has been created

Market Adoption

Mass-market Tour Operators – extending their specialist holiday businesses = Flexible packaging

Independent Specialists – extending their product range to include low cost and hotel-only = Widening the choice for their clients

Online Travel Agencies – actively promoting the widest range of independent travel components = Complete transparency & flexibility – biggest growth

Intermediaries – looking to provide a one-stop dynamic packaging portal for travel agents = Shift in focus to capitalise on new marketplace

Package Holidays

“The report of my death was an exaggeration.” Mark Twain 1897

Package Holidays sold increased by 30% in 5 years

Slow to take off online and not enjoying the growth curve

Dogged by antiquated technology with lack of consistent standards

Lack of quality consumer driven content that supports the sale

Rigid commercial model of charter flight + hotel commitments

Not enough component flexibility

How have Consumer Buying Habits changed?

Dynamic Packaging is 100% consumer driven

Consumers becoming more independent

Shift to late booking

Control, choice, flexibility, competitive prices

Customer expects to search for, price and book all products in real-time

Desire to start self-packaging

Decline of traditional 2 week holiday

OTC – Consumer Booking HabitsBy month 2006 to 2007

Pre-Packaged web sales declined 7% in 2007Dynamic Packaging has grown to 35% of sales

PrepackBYOFlightOther

Drivers on Dynamic packaging

0% 10% 20% 30% 40% 50% 60% 70%

Face to Face Contact

Good Content

After sales support

Time required to book

Choice

Price/value for money

How do you enable your customers? Key focus is to present a customer with:

The Right Product

At the Right Price

At the Right Time

And most importantly At the Right Margin

It’s just like selling sweets at a supermarket check-out

Future of Dynamic Packaging

Flights + Hotels + Car + Insurance is here today

So what are we waiting for?

Get closer control of inventory

Expansion of the number of suppliers with XML

Broadband will drive greater content and opportunities

Advantages of this approach Customer:

Unprecedented choice of product Great Deals – Savings passed to customer Real-time availability Quality consumer driven content Tailor-Made itineraries

Company:

Margins are always maintained Move distressed inventory Upsell and Cross Sell Pricing is constantly updated Avoid incremental costs i.e. brochures